Bes, MartinAlvarez-Estrada, Daniel2014-01-282014-01-282013-06https://hdl.handle.net/10986/16619The recent international financial crisis dealt a hard blow to the region's growth prospects, being reflected in reduced demand for financial services and tourism as well as falling remittances. This was combined in some cases with home grown macroeconomic imbalances and the need to face the costs of financial sector bailouts in other countries. More recently, policymakers have indicated the need to explore the use of tax incentives in order to foster much needed private investment. This policy note analyzes the issues associated with the use of tax incentives and reviews the challenges faced by the region, which has had a not altogether successful experience in controlling tax expenditures. The policy note is organized as follows: the first section explores the diverse nature of the Caribbean and Latin American group of countries referred to in this note: the Bahamas, Barbados, Belize, Dominican Republic, Guyana, Haiti, Jamaica, Suriname and Trinidad and Tobago. This is followed by a word of caution regarding the emphasis on factor accumulation in explaining growth, dampening beforehand any unrealistic expectations regarding growth promoting tax incentives. A brief analytical review of the main direct and indirect tax instruments is included in section three. Section four discusses features of good tax incentive systems. Section five reviews some country experience with provision of tax relief. Last section gives a brief set of recommendations.La reciente crisis financiera internacional asestó un duro golpe a las perspectivas de crecimiento de la región, que se refleja en una reducción de la demanda de servicios financieros y el turismo, así como en la caída de las remesas. La respuesta de las políticas fiscales contra-cíclicas ha sido limitada, ya que los países no gozan de suficiente espacio fiscal y los niveles de deuda en algunos de ellos se encuentran en niveles preocupantes. Las autoridades encargadas de formular políticas han indicado la necesidad de explorar el uso de incentivos fiscales para fomentar la inversión privada que tanto necesitan. Esta Nota de Política analiza los temas asociados con el uso de incentivos (instrumentos, efectividad, experiencias empíricas en desgravación fiscal) y revisa los desafíos que enfrenta la región, que ha tenido una experiencia no del todo exitosa en el control de los gastos fiscales. El documento concluye con un breve conjunto de recomendaciones.en-USCC BY 3.0 IGOACCELERATED DEPRECIATIONACCOUNTINGACCOUNTING FRAMEWORKADMINISTRATIVE AUTONOMYAMOUNT OF CAPITALARREARSBAILOUTSBENEFICIARIESBUSINESS INVESTMENTCAPITAL FORMATIONCAPITAL INTENSITYCAPITAL MOBILITYCORPORATE INCOME TAXCORPORATE INCOME TAXESCURRENCYDEBTDEBT LEVELSDEBTSDEFICITSDEVELOPING COUNTRIESDEVELOPMENT BANKDOMESTIC MARKETECONOMIC DEVELOPMENTSECONOMIC PERFORMANCEECONOMIC POLICIESEMERGING ECONOMIESEMERGING MARKETSEPZEXCISE TAXESEXPANSIONARY POLICIESEXPORTEXPORT PROCESSING ZONESEXPORTEREXPORTSFINANCIAL CONGLOMERATEFINANCIAL DEVELOPMENTFINANCIAL SECTORFINANCIAL SERVICESFOOD PRICESFOREIGN DIRECT INVESTMENTGOVERNMENT SPENDINGHUMAN CAPITALHUMAN DEVELOPMENTINCOME TAX RATEINDIRECT TAXATIONINSTRUMENTINTERNATIONAL BANKINTERNATIONAL COMPETITIONINTERNATIONAL DEVELOPMENTINTERNATIONAL FINANCIAL CRISISINTERNATIONAL TRADEINVESTMENT PROMOTIONINVESTMENT TAX CREDITJOB CREATIONJUDGMENTLIVING STANDARDSMARKET FAILURESMIDDLE-INCOME COUNTRIESMONETARY FUNDNATURAL DISASTERSNATURAL RESOURCESPAYROLL TAXESPERSONAL INCOMEPERSONAL INCOME TAXPOLICY RESPONSEPOLITICAL SYSTEMPRIVATE INVESTMENTPROFITABILITYPUBLIC DEBTPUBLIC DISCLOSUREREMITTANCESSMALL COUNTRIESSOCIAL SECURITY TAXESSOLVENCYSTATUTORY TAXSUNSET CLAUSETAXTAX ADMINISTRATIONTAX AVOIDANCETAX BASETAX BENEFITSTAX BREAKSTAX CODETAX COLLECTIONTAX COMPETITIONTAX CONCESSIONSTAX CREDITSTAX EXPENDITURETAX EXPENDITURESTAX HARMONIZATIONTAX INCENTIVETAX INCENTIVESTAX LIABILITIESTAX MEASURESTAX PLANNINGTAX POLICYTAX RATETAX RATESTAX RECEIPTSTAX RELIEFTAX RETURNSTAX REVENUETAX REVENUESTAX SYSTEMTAX SYSTEMSTAX TREATMENTTAXPAYERSTECHNICAL ASSISTANCETRADE BARRIERSTRADINGTRANSFER PRICINGTRANSITION ECONOMIESTRANSPARENCYVALUE ADDED TAXWorld Bank10.1596/16619